Court Holds Bye-Laws Provide Appeal to General Body, Dismisses Section 9 Petition Seeking Stay of Removal Order
In a significant judgment delivered on October 16, 2026, the Madras High Court clarified the scope of arbitration under the bye-laws of the State Bank of India Officers' Association (Chennai Circle). The bench, led by Mr. Justice K. Kumaresh Babu, dismissed an application under Section 9 of the Arbitration and Conciliation Act, 1996, filed by Mr. G. Ganapathy seeking a stay on his removal from the Executive Committee and primary membership of the association.
The petitioner, Mr. Ganapathy, who held the position of Regional Secretary of the Madurai Module and was an ex-officio Correspondent of the SBOA CBSC School, contended that his removal was unjust and sought an interim stay while arbitration proceedings were initiated under the association's bye-laws. He alleged procedural irregularities, bias in the inquiry committee, and violation of principles of natural justice during the removal process. He argued that the arbitration clause in the bye-laws provided a remedy and that the removal order should be stayed to prevent irreparable harm, including loss of membership benefits.
The respondent association, represented by the General Secretary, opposed the application, submitting that the removal was valid and in accordance with the powers vested in the Executive Committee under clauses 74 to 81 of the bye-laws. They argued that disputes relating to removal of members or office-bearers are not arbitrable under the bye-laws, which instead provide a right of appeal to the General Body. The respondent maintained that invoking arbitration was misplaced and that the appropriate remedy lay either in the internal appeal mechanism or in civil courts.
The Court examined the relevant provisions of the bye-laws, particularly clause 39, which allows voluntary arbitration only for disputes concerning the interpretation of the bye-laws, actions of the Secretariat or Office bearers, and only when serious differences arise within the Executive Committee on a matter of substantial importance. The Court noted that the removal of a member from the association and the elected post did not fall within the scope of the arbitration clause. The bye-laws explicitly empower the Executive Committee to remove members whose conduct is detrimental to the association's interests and provide an appeal mechanism to the General Body, which Mr. Ganapathy had not availed.
In its reasoning, the Court emphasized that the mere existence of an arbitration clause for certain internal disputes does not render every dispute arbitrable. Arbitration can be invoked only where expressly provided. Since the dispute pertained to removal and membership cessation, the Court held that arbitration was not applicable, and the Section 9 petition seeking a stay was not maintainable.
Consequently, the Court dismissed the application without costs, reinforcing the principle that internal disciplinary actions and membership removals in associations governed by specific bye-laws must be challenged through the prescribed internal appeal processes or appropriate civil forums, not through arbitration unless clearly stipulated.
This judgment serves as an important precedent on the arbitrability of disputes involving removal from membership in associations and clarifies the interpretation of arbitration clauses in bye-laws.
Bottom Line:
Arbitration and Conciliation Act, 1996 Section 9 Dispute relating to removal of member/office-bearer from association and primary membership is not arbitrable when the bye-laws do not contain an arbitration clause covering such dispute - Where bye-laws provide appeal to General Body against removal from membership, Section 9 petition for stay of removal order is not maintainable.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 Section 9
